India’s Startup Ecosystem Has Been Blown Away By WhatsApp’s New Payments Feature

WhatsApp’s payments feature hasn’t even made it to all phones yet, but it’s already created quite a splash.

India’s startup community appears to have been uniformly blown away with WhatsApp’s new launch. Prominent entrepreneurs have quickly got their hands on the feature, and have been gushing about how it fundamentally changes the payments landscape in India.

And people eagerly tried out the feature for themselves, and couldn’t help but rave about how seamless payments were. “Made my first payment transaction on WhatsApp and I think this changes everything,” said Toppr CEO and angel investor Zishaan Hayath.

And entrepreneurs who were once in the payments business themselves were also impressed. Snapdeal CEO Kunal Bahl, who once had a P2P payment product of his own in FreeCharge, said WhatsApp would make P2P transfers easier than ever before. Snapdeal, of course, had soldFreeCharge to Axis Bank last year.

FreeCharge founder Kunal Shah also tried out the feature. “Sending money is now as easy as sending pics on WhatsApp,” he wrote on Facebook.

Foreign journalists also realized how big a deal it could be. “If UPI for WhatsApp works, it will be the most impressive (not to mention biggest) payments mechanism outside China,” said Stanley Pignal, who writes for The Economist.

If UPI for WhatsApp works, it will be the most impressive (not to mention biggest) payments mechanism outside China. Despite being a huge fan of the UPI concept, I've found using it to be infuriating thus far. Really hoping this latest iteration is robust enough.

It’s not hard to see why reactions have been so uniformly positive. WhatsApp has managedto integrate payments seamlessly into its chat messenger. Instead of having a separate tab for payments, WhatsApp has re-imagined payments as just another attachment that users send through its service. Millions of Indians already send photos and videos through WhatsApp everyday; it won’t be hard for them to make the leap to payments. It also helps that WhatsApp’s user sign up is seamless — instead of making people choose a VPA, it automatically assigns them one, making it much easier for the non-technical user to begin sending and receiving payments.

All this will worry other UPI players in the country. PhonePe, BHIM and Google Tez have spent millions of dollars in cashbacks and incentives to get Indians to transact on their platforms. But with WhatsApp now providing essentially the same functionality, it’s hard to imagine why anyone would use them to make payments. Most Indians already use WhatsApp multiple times a day — it’s only natural they’ll use it for payments as well. UPI apps had initially sought to disrupt cash, but they might end up getting disrupted themselves.